What is the SERP?

The Search Engine Results Page (SERP) is that page you see when you’re searching for something on Google, Bing, Yahoo or one of many thousands of search engines out and available. If you are not on the SERP, then people can’t find you. It’s like not being listed in the Yellow Pages as a business back in the day when phonebooks meant something. People needing your services can’t find you and will find someone else. If you’re not on the SERP, you’re invisible. Your phone doesn’t ring. You get no email. You get no new business.

What is the make-up of the SERP?

The SERP is typically broken up into three or four sections.  Each section is determined by the search engines company as to where you rank on that page. Unit rank on page number 14 being, and page number 10 google. The ranking on Google will have much more impact on your business and the ranking on Bing, and both are important. Some search engines offer advertising placement and some do not. Some allow you to buy your way to the top, and some do not. Duckduckgo.com for instance does not allow advertising.

Since Google is the most important search engine results page, we’re going to stick with Google as the example of how to get ranked and how to be found in each of the sections of the SERP.

The first section, shows registered licensed companies that answer the question you’re asking. This is a new section for Google that doesn’t apply to all businesses. It’s only those type of businesses that Candy verified through licensing. The registration process is long and tedious, and at the end you’ll be offered to pay for your placement in that section.

The second section our ads. These can be purchased from Google at what is referred to as pay per click pricing. Pricing changes based on where you are, and who else’s advertising against you for a competitive marketplace. In the world of roofers, if all roofers new how valuable these clicks were, then add would be hundreds of dollars per click. Right now they’re dollars per click. They are a bargain.

The next section, the one with the map, is referred to as the Google 3–pack. Google uses their own measures for which three roofers are the most important in a Geo targeted area. This area is usually determined by where the users are located using either GPS for mobile, or your IP address for desktop access.

The fourth section is what’s referred to as search engine optimized (SE0) rankings. These rankings have literally millions of rules that determine whether or not you will be ranked. If Your ranking in this area it’s typically because Google finds you both relevant and appropriate for the search term used in the search bar.

If, as a marketer, you can be ranked in all four areas, then the probability that somebody will click on you is extremely high. On that page if you are found four times somebody is likely to buy the time to read your name the fourth time think that you are the right business for what they have going on. In the legal business ”Accident lawyer” as a search term will have whole teams of people designed to rank those keywords because the value of that keyword is so high costing tens of thousands of dollars per month to maintain those rankings.

The value of the keyword is directly related to the value of the new business that can be acquired through a successful search and phone call by somebody looking for your business. This is referred to as the “lifetime value” of a customer, which can be found in another post.

What is the lifetime value of a customer and why do you care?

At a very basic level, the lifetime value of a customer is the total amount of revenue you can expect to generate from any new client walking in the door. You care about this number because that’s the payoff for a marketing investment.

Marketing Investment?

Yes, that’s the nature of marketing. You take a small amount of money and expect to receive a large amount of money in return. This is the Return On Investment (ROI).  The lifetime value of your customer will ultimately be the most amount of money you would be willing to spend to acquire that customer to receive the return on investment you’re looking for.

Now we all know that each client walking through the door will ultimately generate a different value. Some will need a smaller sliver of your services, and some will need a lot. Some will stick around for a day, and some will stick around for the lifetime of your business. This is and what we’re talking about.

The basic layout of the lifetime value of a client is the amount of money you expect to generate within a year, the number of years you expect to do business with that person and the number of referrals that new client will bring to your business.

Revenue

The single most important value to know is the amount of revenue that new client will generate for you every year. For one time only businesses, like roofing, that number maybe somewhere around $15,000. If you’re a veterinarian, that number maybe somewhere around $750. If you’re running a salon, that number maybe around $1200 for women, and $300 for men. It’s important you know this number, so go look back into your business. Don’t take an estimate or a thought or a feeling. It’s critical that this be concrete and in the real world.

Years

The other opposing important figure is the number of years a new client will be with you. Your Business will have a different average number of years that the client will stay with you. It’s important that you know this information. It’s difficult to put your thumb in the air in squint a bit and guess. It’s important you look back through your records and know how long a new client will stay with you. If you’re a one time only business, like roofing, then expect that number to be once in every 20+ years, meaning you should call at one time transaction, or just one year for our calculation.  If you’re a returning business, like veterinarians, then usually that number somewhere around 4 years. If you’re a salon, that number maybe upwards of 6 or 7 years. This is all based on customer loyalty and how often people like to make changes in their services.

Referral

The last number we use is the referral rate. Most returning businesses have referral rates between 25% and up to 40%. This means that between 25% and 40% of that business comes from referrals from existing clients. Some businesses get almost none of their business from referral, like oil changing.  This number is important because it adds more value to the value of the new client coming in the door. They will bring their friends with them! So despite closing the single deal, you’re actually getting their close friends who they trust and love.

If your business is a one-time only business, like roofing, the net amount of income is based on the business you generate on the spot. The income may be on average $15,000 for residential roofing. The number of years is one. Even the roofing business has a referral rate. Meaning that client will refers their friends who need a new roof. I have seen referral rates for roofers however between 20% and 30%. It’s like earning an additional 25% or 30% on that initial $15,000. So for the mass of this fictitious roofer were talking about now, he income is $15,000, the lifetime value of a client’s one-year, in the referral rate is 25%. So conservatively we can say that a client raising $15,000 and you can uplift that $15,000 by 25% to get $18,750dollars. That’s the lifetime value of a roofing client. That’s how much money you’ll earn when you land a new roofing client. How much money would you be willing to spend to earn $18,750? Quite a bit.

If your business is a returning business, like veterinarians, then the numbers are completely different. Annually you might expect to earn somewhere around $500-$750 depending on the type of business. Those new pet patients may stick around for between three and five years, we’ll stick with four. Pet owners tends to refer their friends at between 25% and 35%. We’ll stick with the low end of 25%.  So conservatively the average new pet patient coming in the door is worth $2500. And really, if you think about the possibility that each year a pet patient will bring in one quarter other person, that means over the four years of their relationship with you they will bring in at least one friend of theirs. So for each new pet patients you bring in, you’ll have a second one. That means the full-blown value of a new pet patient is $4000. How much money would you be willing to spend to earn $4000? Since all of your fixed costs are already paid for, this is almost all variable income. You should be willing to spend upwards of $3,500 dollars for that $4,000 payoff and still make $500.

This lifetime value of a new client is the single most important number you need to keep in mind to grow your business. If you don’t know how much that new client’s worth, then you won’t value the cost of bringing that new client in. If you’re concerned about how to generate this number for yourself, schedule an appointment with me and I’ll walk you through the numbers for your business.